loopholes through tax reform, which speaker boehner has acknowledged can raise money in a sensible way, and by doing some additional cuts, including making sure that we are reducing our health care spending, which is the main driver of our deficits, we can arrive at a package that gets this thing done. i'm happy to have that conversation. what i will not do is to have that negotiation with a gun at the head of the american people. the threat that unless we get our way, unless you gut medicare or medicaid, or, you know, otherwise slash things that the american people don't believe should be slashed, that we're going to threaten to wreck the entire economy. that is not how, historically, this has been done. that's not how we're going to do it this time.

[ inaudible question ] chuck, what i'm saying to you is that there is no simpler solution, no ready, credible solution other than congress either give me the authority to raise the debt ceiling or exercise the responsibility that they have kept for themselves and raise the debt ceiling. because this is about paying your bills. everybody here understands this. i mean, this is not a complicated concept. you don't go out to dinner and then, you know, eat all you want, and then leave without paying the check. and if you do, you're breaking the law. and congress should think about it the same way the american people do. you don't -- now, if congress wants to have a debate about maybe we shouldn't go out to dinner next time, maybe we should go to a more modest

restaurant, that's fine. that's the debate that we should have. but you don't say, in order for me to control my appetites, i'm going to not pay the people who already provided me services. people who already lent me the money. that's not showing any discipline. all that's doing is not meeting your obligations. you can't do that. and that's not a credible way to run this government. we've got to stop lurching from crisis to crisis to crisis when there's this clear path ahead of us, that simply requires some discipline, some responsibility, and some compromise. that's where we need to go. that's how this needs to work. major garrett? >> thank you, mr. president. as you well know, sir, finding votes for the debt ceiling can sometimes be complicated.

you, yourself, as a member voted against a debt ceiling increase. and in previous aspects of american history, president reagan in 1985, president george herbert walker bush in 1990, president clinton in the 1997, all signed deficit reduction deals that were contingent upon or in the context of raising the debt ceiling. you yourself four times have done that. three times those have been related to budget deficit maneuvers. what chuck and i and i think many people are curious about is this new adamant desire on your part not to negotiate when that seams to conflict with the entire history of modern era presidents on the debt ceiling and your own history on the debt ceiling, and doesn't that suggest that we are going to go into a default situation because nobody is talking with each other about how to resolve this? >> no, major, i think if you look at history, getting votes for the debt ceiling are always

difficult. but we never saw a situation as we saw last year in which certain groups in congress took such an absolutist position, that we came within a few days of defaulting. and the fact of the matter is that we have never seen the debt ceiling used in this fashion, where the notion was, you know what, we might default, unless we get 100% of what we want. that hasn't happened. now, as i indicated before, i'm happy to have a conversation about how we reduce our deficits further in a sensible way. although, one thing i want to point out is that the american people are also concerned about how we grow our economy, how we put people back to work, how we make sure that we finance our workers getting properly trained and our schools are giving our kids the education they deserve. there's a whole growth agenda

which will reduce our deficits that's important as well. but, what you've never seen is the notion that has been presented so far, at least, by the republicans, that deficit reduction will only count spending cuts. that we will raise the deficit or the debt ceiling dollar for dollar on spending cuts. their whole set of rules that have been established that are impossible to meet without doing severe damage to the economy. and so, what we're not going to do is put ourselves in a position where in order to pay for spending that we've already incurred, that our two options are, we're either going to profoundly hurt the economy and hurt middle class families and hurt seniors and hurt kids who are trying to go to college, or,

alternatively, we're going to blow up the economy. we're not going to do that. isn't t [ inaudible question ] no, not whatever congress says, they'll have to send me something that's sensible, and we shouldn't be doing this on a one to two-month time frame. why should we be doing that? this is the united states of america, major. we can't manage our affairs in such a way that we pay our bills and we provide some certainty in terms of how we pay our bills? look, i don't think anybody would consider my position unreasonable here. i have -- [ inaudible question ] >> major, i am happy to have a conversation about how we reduce our deficits. i'm not going to have a monthly or every three months conversation about whether or not we pay our bills.

because that in and of itself does severe damage. even the threat of default hurts our economy. it's hurting our economy as we speak. we shouldn't be having that debate. if we want to have a conversation about how to reduce our deficit, let's have that. we've been having that for the last two years. we just had an entire campaign about it. and by the way, the american people agreed with me. that we should reduce our deficits in a balanced way that also takes into account the need for us to grow this economy and put people back to work. and despite that conversation and despite the election results, the position that's been taken on the part of some house republicans is that, no, we've got to do it our way. and if we don't, we simply won't pay america's bills. well, that can't be a position that is sustainable over time.

it's not one that's good for the economy now. it's certainly not going to be the kind of precedent that i want to establish, not just for my presidency, but for future presidents. even if it was on the other side. democrats don't like voting for the debt ceiling when a republican's president. and yet, you, but you never saw a situation in which democrats suggested somehow that we would go ahead and default if we didn't get 100% of our way. that's just not how it's supposed to work. john carl? >> thank you, mr. president. on the issue of guns, given how difficult it will be, some would say, impossible, to get any gun control measure passed through this congress, what are you willing or able to do using the powers of your presidency to act without congress? and i'd also like to know, what do you make of these long lines we're seeing at gun shows and gun stores all around the country? i mean, even in connecticut,

applications for guns are up since the shooting in newtown. >> well, my understanding is the vice president's going to provide a range of steps we can take to reduce gun violence. some of them will require legislation, some of them i can accomplish through executive action. so i'll be reviewing those today, and as i said, i'll speak in more detail to what we're going to go ahead and proposal, later in the week. but i'm confident that there are some steps that we can take that don't require legislation and that are within my authority as president. where you get a step that has the opportunity to reduce the possibility of gun violence, then i want to go ahead and take it. >> can you give me an idea -- >> well, i think, for example, how we are gathering data, for example on guns that fall into the hands of criminals and how we track that more effectively.

there may be some steps that we can take administratively, as opposed to through legislation. as far as people lining up and purchasing more guns, i think that we've seen for some time now that those who oppose any common sense gun control or gun safety measures have a pretty effective way of ginning up fear on the part of gun owners, that somehow the federal government's about to take all your guns away. and there's probably an economic element to that. it obviously is good for business. but i think that those of us who look at this problem have repeatedly said that responsible

gun owners, people who have a gun for protection, for hunting, for sportsmanship, they don't have anything to worry about. the issue here is not whether or not we believe in the second amendment. the issue is, are there some sensible steps that we can take to make sure that somebody like the individual in newtown can't walk into a school and gun down a bunch of children in a shockingly rapid fashion. and surely, we can do something about that. but part of the challenge that we confront is that even the slightest hint of some sensible, responsible legislation in this area fans this notion that

somehow, here it comes. and that everybody's guns are going to be taken away. and it's unfortunate, but that's the case, and if you look over the first four years of my administration, we've tried to tighten up and enforce some of the laws that were already on the books. but it would be pretty hard to argue that somehow gun owners have had their rights infringed. [ inaudible question ] excuse me? well, as i said, i think it's a fear that's fanned by those who are worried about the possibility of any legislation getting out there. joanna goldman. >> thank you, mr. president. i just want to come back to the debt ceiling. because in the summer of 2011,

you said that you wouldn't negotiate on the debt ceiling and you did. last year, you said that you wouldn't extend any of the bush tax cuts for the wealthy, and you did. so as you say now that you're not going to gosht on the debt ceiling this year, why should house republicans take that seriously and think that if we get to the one minute to midnight scenario that you're not going to back down? >> first of all, julianna, let's take the example of this year and the fiscal cliff. i didn't say that i would not have any conversations at all about extending the bush tax cuts. what i said was, we weren't going to extend bush tax cuts for the wealthy. and we didn't. now, you can argue that during the campaign, i said -- i set the criteria for wealthy at 250, and we ended up being at 400, but the fact of the matter is, millionaires, billionaires are paying significantly more in taxes, just as i said.

so from, you know, from the start, my concern was making sure that we had a tax code that was fair and that protected the middle class, and my biggest priority was making sure that middle class taxes did not go up. you know, the difference between this year and 2011 is the fact that of we've already made $1.2 trillion in cuts. and at the time, i indicated that there were cuts that we could sensibly make that could not damage our economy, would not impede growth. i said at the time, i think we should pair it up the revenue in order to have an overall balanced package. but my own budget reflected cuts in discretionary spending. my own budget reflected the cuts that needed to be made. and we've made those cuts. now, the challenge going forward

is that we've now made some big cuts. and if we're going to do further deficit reduction, the only way to do it is in a balanced and responsible way. the alternative is for us to go ahead and cut commitments that we've made on things like medicare or social security or medicaid, and for us to fundamentally change commitments that we've made to make sure that seniors don't go into poverty. or that children who are disabled are properly cared for. for us to change that contract we've made with the american people, rather than look at options like closing loopholes for corporations that they don't

need, that points to a long-term trend in which, you know, we have fundamentally, i think, undermined what people expect out of this government, which is that parties sit down, they negotiate, they compromise, but they also reflect the will of the american people. that you don't have one narrow faction that is able to simply dictate 100% of what they want, all the time, or otherwise threaten that we destroy the american economy. another way of putting it is, we've got to break the habit of negotiating through crisis, over and over again. and now's a good of a time as any, at the start of my second term. because if we continue down this path, then there's really no stopping the principle. i mean, literally, even in divided government, even where we've got a democratic president

and a democratic senate and a small group in the house of representatives, to simply say, every two months, every three months, every six months, every year, we are going to more and more change the economy in ways that we prefer, despite strong objections of americans all across the country or otherwise we're going to have america not pay its bills. and that is no way for us to do business. and by the way, i would make the same argument if it was a republican president and a republican senate and you had a handful of democrats who were suggesting that we are going to hijack the process and make sure that either we get our way 100% of the time or otherwise, we are going to default on america's obligations. [ inaudible question ] look, what i've said is that i'm happy to have a conversation

about deficit reduction. no, julianna, look, this is pretty straightforward. either congress pays its bills or it doesn't. now, if -- and they want to keep this responsibility, if john boehner and mitch mcconnell think that they can come up with a plan that somehow meets their criteria that they've set for why they will -- when they will raise the debt ceiling, they're free to go ahead and try. but the proposals that they've put forward, in order to accomplish that, only by cutting spending, means cuts to things like medicare and education, that the american people profoundly reject. now, if they think that they can get that through congress, then they're free to try. but i think that a better way of doing this is to go ahead and

say, we're going to pay our bills. the question now is, how do we actually get our deficit in a manageable, sustainable way. and that's a conversation i'm happy to have. all right. matt spetaling. >> thank you, sir. you've spoken extensively about the debt ceiling debate, but some republicans have further said that they're willing to allow a government shutdown to take place rather than put off deep spending cuts. are you prepared to allow the government to grind to a halt if you disagree with the spending cut proposals they put forth? and who do you think the american people would blame if that came to pass? >> well, ultimately congress makes the decision about whether or not we spend money and whether or not we keep this government open. if the republicans in congress

make a decision that they want to shut down the government in order to get their way, then they have the votes at least in the house of representatives, probably, to do that. i think that would be a mistake. ting it would be profoundly damaging to our economy. i think it would actually add to our deficit, because it will impede growth. i think it's shortsighted. but they're elected representatives, and folks put them into those positions and they're going to have to make a decision about that. and i don't -- i suspect that the american people would blame all of washington for not being able to get its act together. but the larger issue here has to do with, what is it that we're trying to accomplish? are we trying to reduce the deficit? because if we're trying to reduce the deficit, then we can shape a bipartisan plan to reduce the deficit. i mean, is that really our objective?

our concern is that we're spending more than we take in and if that's the case, then there's a way of balancing that out so that we take in more money, increasing revenue, and we reduce spending. and there is a recipe for getting that done. and in the conversations i had with speaker boehner before the end of the year, we came pretty close. a few hundred billion dollar separating us when stretched out over a ten-year period, that's not a lot. but it seems as if what's motivating and propelling at this point some of the house republicans is more than simply deficit reduction. they have a particular vision about what government should and should not do. so they are suspicious about government's commitments, for example, to make sure that seniors have decent health care as they get older. they have suspicions about

social security. they have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending on medical research. so they've got a particular view of what government should do and should be. and that view was rejected by the american people when it was debated during the presidential campaign. i think every poll that's out there indicates that the american people actually think our commitment to medicare or to education is really important. and that's something that we should look at as a last resort in terms of reducing the deficit, and it makes a lot more sense for us to close, for example, corporate loopholes, before we go to putting a bigger burden on students or seniors.

but if the house republicans disagree with that and they want to shut down the government to see if they can get their way on it, that's their prerogative. that's how the system's set up. it will damage our economy. the government is a big part of this economy. and it's interesting that a lot of times, you have people who recognize that when it comes to defense spending. some of the same folks who say we've got to cut spending or complain that government jobs don't do anything, when it comes to that defense contractor in their district, they think, wow, this is a pretty important part of the economy in my district. we shouldn't stop spending on that. let's just make sure that we're not spending on those other folks. [ inaudible question ]

>> look, my hope is that common sense prevails. that's always my preference. and i think that would be the preference of the american people and that's what would be good for the economy. so let me just repeat. if the issue is deficit reduction, getting our deficits sustainable over time, getting our debt in a sustainable place, then democrats and republicans in congress will have a partner with me. we can achieve that and we can achieve it fairly quickly. we know what the numbers are, we know what needs to be done. we know what a balanced approach would take, and we've already done probably more than half of the deficit reduction we need to stabilize the debt and the deficit. there's probably been more pain and drama in getting there than we needed. and so finishing the job shouldn't be that difficult, if everybody comes to the conversation with an open mind

and if there's some things like paying our bills should not be out of bounds. i'll take one last question. >> mr. president, i would like to ask you, now that you've reached the end of your first term, starting your second, about a couple of criticisms. one that's long-standing, another more recent. the long-standing one seems to become a truism of sorts, that you and your staff are too insular, that you don't socialize enough. and the second, the more recent criticism is that your team taking shape isn't as diverse as it could be or even was in terms of getting additional voices, gender, race, ethnic diversity. so i would like you to address both of those. >> sure. let me take the second one first. i'm very proud in the first four

years, we had as diverse if not a more diverse white house and cabinet than any in history. and i intended to continue that. because it turns out when you look for the very best people, given the incredible diversity of this country, you're going to end up with a diverse staff and a diverse team and that very diversity helps to create more effective policy making, and better decision making for me, because it brings different perspectives to the table. so if you think about my first four years, the person who probably had the most influence on my foreign policy was a woman. the people who were in charge of moving forward my most important initiative, health care, were women. the person in charge of our homeland security was a woman. my two appointments to the supreme court were women.

and 50% of my white house staff were women. so i think people should expect that that record will be built upon during the next four years. now, what, i've made four appointments so far? and one woman, admittedly, a high-profile one, is leaving -- has already left the administration and have made a replacement. but i would just suggest that everybody kind of wait until they've seen all my appointments, who's in the white house staff and who's in my cabinet before they rush to judgment. [ inaudible question ] yeah, but, i guess what i'm saying, jackie, is, i think until you've seen what my overall team looks like, it's premature to assume that somehow we're going backwards. we're not going backwards, we're going forward.

with respect to this truism about me not socializing enough and patting folks on the back and all that stuff, most people who know me know, i'm a pretty friendly guy. and i like a good party and, you know, the truth is that, you know, when i was in the senate, i had great relationships over there and up until the point i became president, this was not an accusation that you heard very frequently. i think that really what's gone on in terms of the paralysis here in washington, or difficulties in negotiations, just has to do with some very stark differences in terms of policy. some very sharp differences in terms of where we stand on

issues and, you know, if you think about, let's say, myself and speaker boehner, i like speaker boehner, personally. and when we went out and played golf, we had a great time, but that didn't get a deal done in 2011. you know, when i'm over here at the congressional picnic and foc folks are coming up and taking pictures with their family, i promise you, michelle and i are very nice to them, and we have a wonderful time, but it doesn't prevent them from going under the floor of the house and, you know, blasting me for being a big-spending socialist. and the reason that, you know, that in many cases congress votes the way they do or talks the way they talk or takes positions and negotiations that they take doesn't have to do with me. it has to do with the

imperatives that they feel in terms of their own politics, right? they're worried about their district. they're worried about what's going on back home. i think there are a lot of republicans at this point that feel that given how much energy has been devoted in some of the media that's preferred by republican constituencies to demonize me, that it doesn't look real good socializing with me. charlie crist down in florida testifies to that. and i think a lot of folks say, well, if we look like we're being too cooperative or too chummy with the president, that might cause us problems. that might be an excuse for us to get a challenge from somebody in a primary. so that tends to be the challenge. i promise you, we invite folks

from congress over here all the time. and when they choose to come, i enjoy their company. sometimes they don't choose to come and that has to do with the fact that i think they don't consider the optics useful for them, politically. and ultimately, the way we're going to get stuff done, personal relationships are important, and obviously, i can always do a better job, and the nice thing is that now that my girls are getting colder, they don't want to spend that much time with me, anyway. so i'll be probably calling around, lackiooking for somebod play cards with me or something, because i'm getting kind of lonely in this big house. so maybe a whole bunch of members of the house republican caucus want to come over and socialize more. but my suspicion is getting the issues resolved that we just talked about, the big stuff. whether or not we get sensible laws passed to prevent gun violence.

whether or not america's paying its bills. whether or not we get immigration reform done. all that's going to be determined, largely, by where the respective parties stand on policy, and maybe most importantly, the attitude of the american people. the american people feel strongly about these issues and they push hard and they reward or don't reward members of congress with their votes, you know, if they reject sort of uncompromising positions or sharp partisanship or always looking out for the next election and they reward folks who are trying to find common ground, then i think you'll see behavior in congress change. and that will be true whether i'm the life of the party or a stick in the mud. all right? thank you very much, everybody.

>> all right. so there he is, the president, nearly a one-hour news conference, wrapping through a lot of the most important issues on his agenda right now. this is his last formal news conference, we're told, in his first term as president of the united states. the formal, official inauguration is coming sunday. on monday, all the pomp and ceremony here in the nation's capital. the most important issue is the economic issue, the u.s. economy, jobs. the president stating firmly, forcefully, as he has before, he will not negotiate with congress when it comes to raising the nation's debt ceiling. what i will not do, the president said, is negotiate with a gun at the head of the american people. very strong words from the president. he was clearly frustrate, clearly anger at the republicans right now, threatening that he's not going to go ahead and let them do, let them try to use raising the nation's debt ceiling, raising the nation's debt ceiling as leverage in getting further spending cuts. john king is here, gloria borger is here with us.

both of you stand by. brianna keilar was at the news conference. she's over there at the white house. brianna, the president was very tough in offering his assessment on what needs to be done. >> reporter: that's right, wolf. and he said he will not negotiate on the debt ceiling, the end. he has reiterated that, and this was his chance to come out today and say it yet again. he said today that the united states is not a deadbeat nation. and the point that he was making and i think we'll be hearing a lot more of, and we've heard some of in the past, is that he says this is spending that has already taken place. he used an analogy where he talked about, you go out for a meal at the restaurant and then you don't pay the bill. he's saying this is the equivalent of that. he was asked about the fact that republicans, this really is one of their only cards to play at this point, but he said that it's irresponsible and it's absurd. and he was also asked as well, wolf, about a couple of other

topics, of course, gun violence, where he seemed to indicate that he already had vice president biden's recommendations, that he should take -- we were expecting these to come to the president tomorrow, but he already has these. he says he's reviewing them and he'll sit down with vice president biden, and that later this week, he'll be talking about the proposals that he wants to push. there's been some signs that the administration may not vigorously push for that assault weapons ban, that we know president obama, at least in principle, supports, but politically would be a very difficult lift for congress. he sort of sidestepped whether that was something that he was going to move forward, but said that there's a list of common sense proposals. and finally, wolf, he was asked just one question about this criticism that he's received recently, because of his top cabinet picks, really lacking diversity, being all white men, not enough women. among them, he said, stay tuned for the other picks in his cabinet, that he thinks in the end, he will have continued his tradition of having women in the white house, in the white house

and also on his cabinet. but for right now, some of that criticism still does persist, wolf. >> it does, indeed. brianna, stand by. john king, the president said if the republicans don't go along, social security recipients, their checks will go away, veterans' benefits will go away, inspector who is deal with loose nukes, they're not going to be able to pay the bills. investors around the world will lose their confidence in the the u.s. economy and the nation's debt, as a result, are increase. those are pretty strong words from the president. >> strong words, and many of them familiar, if you go back to this showdown two years ago. and he also said one of the results of the showdown two years ago was the united states having its credit rating downgraded. no question, repeated references to the election, i won, was the message. the president's message was, look at the polls, look at the election, i won. clearly on this dead issue, the spending issue, he believes at the moment he has the high ground. he says he will not allow the republicans to collect a ransom.

he wants to keep them separate. last time he did agree to negotiate. but look down at that fight for a minute, you cannot leave this news conference optimistic. the republicans are already issuing statements saying, sorry, mr. president, we want more spending cuts. now lift your head and look to the second term. the debt ceiling, spending, debates with congress, immigration reform, gun control. this shapes up -- if you thought the election was going to create this moment of, let's get things done in washington, it's clear from listening to this hour that the president and the republican base are going to go this, this, this over just about anything you can think of. >> the president was talking about today, we have to stop lurching from crisis to crisis to crisis. but what we got at this press conference was essentially a guarantee that that's what's going to happen. what we saw from the president today, sort of pre-outrage, setting the table before the republicans get a chance to do that. and in advance of republican

actio action, the president called them irresponsible and absurd, because he knows exactly what they're thinking. he knows what happened on the fiscal cliff, he knows where they are on the debt ceiling and he made the argument today, and it's the bigger picture argument, which is, there is a difference between how democrats believe government, what government should do, how large government should be, what it should do for you. with republicans who believe that they want a smaller, more pared down government. that's the turf he wants to have this fight on. he said, look, we have to have a balanced debate, so you have a balance of spending cuts and a growth agenda. he's still talking about his growth agenda. republicans don't want to hear that. >> they're talking separately. to get any of these hard things done, you have to have conversations. from the guns case, for example, they invite the nra to the meeting, the nra leaves the meeting, they are now clearly divided. the president says he's not trying to take away anyone's

second amendment rights, the nra says he's trying a direct assault on the second amendment. you have confrontation. >> dana bash is up on capitol hill. dana, you're already getting reaction from the republican leadership? >> reporter: that's right. the house speaker, first and foremost, this was clearly being written and was sent the second the president walked out of the east room. speaker boehner saying that the american people do not support raising the debt ceiling without reducing government spending at the same time, something that we've heard him say time and time again. he also says, the consequences of fail to increase are real, but so to are allowing our spending problem to go unresolved. he goes on to say, the house will do its job and pass responsible legislation that reduces spending and insists that washington do the same. so clearly, another confrontational statement from the house speaker. this is thing that house

republicans are, have been trying to figure out amongst themselves, how far they can go. and you heard some of the questions to the president, some of the talking points that we've been getting all morning, from not just house republicans, but interesting from senate republicans, making the case that this whole idea of tying spending cuts or spending restraint to the debt ceiling is not new. we've gotten several memos saying in 1985, 1993, 1997, it was all tied up in the debt limit. trying to sort of put the onus back on the president, even though it was very clear, the president does feel that he has a lneverage in saying that it hs the congress that has the pursestrings and it will be the congress' fault or not if the nation defaults on its debt. so very, very interesting response. and again, very interesting conversations being had. as we speak, there's a republican leadership retreat going on in the house. and at the end of the week,

there's going to be a full retreat of all house republicans, conversations about just how far they are willing to go. >> anyone thought these days leading up to the second inauguration would be quiet and easy, and full of history and pomp and ceremony, they were clearly wrong. later in the week, the president said he'd be speaking out on the recommendations from the vice president on gun control in the united states. let's take a quick break. ali velshi is also standing by. we'll check in with him and get his reaction when we come back. [ male announcer ] this is sheldon, whose long dy setting up the news starts with arthritis pain and a choice. take tylenol or take aleve, the #1 recommended pain reliever by orthopedic doctors. just two aleve can keep pain away all day. back to the news. just two aleve can keep pain away all day. ♪

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we're back. following the president's news conference, in which he said he will not negotiate with congress when it comes to raising the nation's debt ceiling. strong words from the president, equally strong reaction coming in from the republican leadership, the speaker of the

house, john boehner. ali velshi has been watching and listening. ali, what do you think about this news conference and the immediate reaction we're getting? because as you know, better than most, the stakes for the american economy, for the american people, indeed, the global economy, are enormous. >> i actually agree with something gloria borger said earlier, this is actually more serious than the new year's eve/new year's day conversations on the fiscal cliff. look, the sad part is if you take it in context, there's a problem that the president and some of his then-colleagues in the senate had when in '06, they also voted against increases to the debt ceiling. it's been fashionable for some time to do this, to tie it to spending. you know, his analogies today were better. the idea that it's like going to a restaurant, eating all you want, and not paying the bill. if you want to have a conversation in eating in a more modest restaurant or not going out to restaurants as much, that's a different conversation. but unfortunately he has fallen victim to this himself. all of washington has. he's right to take a strong view on this, though, wolf. it was very, very damaging in

august of '11 to have this conversation about not having the bills. you can see there, the debt ceiling is at 16.4 trillion and we've breached it. so that's the problem. we do actually have to do this. if we do default on payments, it won't be because the u.s. can't pay it. people are actually sympathetic about that sort of thing. look at europe. the issue is that we won't pay it, even though we can't. the idea of holding payments for things that have already been incurred as hostage will have an impact on the interest rates that the united states pays to borrow money. and we borrow a lot of money. when the ten-year bond rate goes up, it affects other loans that americans take. this could be very economically detrimental, right at a time when the u.s. is starting to make some economic strides. the president's position is right, but history isn't on his side and republicans aren't on his side. >> let me bring john and gloria back to this conversation. john, the democratic leadership in the senate, harry reid, jim

clyburn, he just invoked the 14th amendment, forget about congress, and raise the nation's debt ceiling. >> the president very clearly said this was up to congress. from everything he said in that news conference, it's clear he does not want to do that, and at least as of now, his public position is he's not going to do that. if the united states government has to shut down, he is going to blame the congress. it is clear he believes he has the high ground here. to ali's point about the bigger consequences, this is a president who at the end of his first term has to think about his second term and about his legacy. clearly, confrontation on his nomination for defense secretary. so if the president has to start wondering about, what is my window to get things done? you can say they're not connected, yet they're all connected. the mood the washington, the spirit in washington, the willingness to get things done in washington, the trust deficit the biggest deficit in

washington, between he and republicans. so he thinks the ball is in their court and the pressure is on him. but at some point, when does he become the president and try to shake them for his own good, for his own legacy to drag them across. >> the president asked sort of the large question, which is, what are we trying to accomplish here? if you are trying to get a grand, bipartisan deficit reduction plan as a part of some debt ceiling compromise, i think what the president is saying today and what we hear republicans saying is, forget it. it's not going to happen. the republicans believe that they've already dealt with taxes. part of any grand compromise has always been the question of tax reform, closing loopholes, lowering rates. when you talk to republicans, they're like, we've had the tax conversation, we just want to have the spending conversation. the president is saying, you can't have one without the other. >> the conversation is only just beginning. the clock is clearly ticking,

guys. thanks very much. much more coming up here on cnn, throughout the day, our special coverage will continue with suzanne malveaux in the "cnn newsroom" right after this. you name it...i've hooked it. but there's one... one that's always eluded me. thought i had it in the blizzard of '93. ha! never even came close. sometimes, i actually think it's mocking me. [ engine revs ] what?! quattro!!!!! ♪

welcome to "cnn newsroom." i'm suzanne malveaux. president obama spent the better part of the hour talking about the debt ceiling. so we'll go into the details about what it is, exactly. it is a cap on the amount of money the federal government may borrow. the cap is actually set by congress. so it includes money the federal government borrows from the public. for example, u.s. bonds, right? also includes debt that the treasury owes the government, trust funds like social security and medicare. right now, the ceiling, is it

set at almost $16.4 trillion. the country's borrowing already hit that mark. that happened on december 31st. so the ceiling is raised periodically because both parties, they have to have approved the tax cuts and the spending increases over the years, knowing that they're going to add to the deficits. by doing so, they increase the country's need to borrow in the future. since 1962, congress has raised the debt limit 76 times, 11 times in the past decade. i want to talk about the debate over the debt ceiling, how it affects the overall economy. our georgia tech economics professor, danny boston joining us. danny, you and i were listening to the news conference here. obviously, this is a very important issue. and the president, he is not backing down. he says it is not negotiable here. what is the problem? what would happen if, in fact, they don't come to some sort of an agreement? >> the consequences are really enormous. and they are beyond, simply, the fact that we will default and not be able to, of course, pay

our debt and have a downgrade of credit ratings. >> sure. >> that's the short-term consequences, which will be significant, but the longer term consequences relate to where will we be as a nation. because the first time we had these problems, we kind of struggled through them in a mesmes messy way. the second time, the rest of the world would have the opinion that we're not capable of seriously dealing with these issues. so it affects, where will we be necessary terms of a world leadership, as an economy, whether the rest of the world will continue to use the dollar as a reserve economy. where will wall street be in terms of his leadership? so it really, in the long run perspective, it really relates to where this economy will be from a global perspective, and how the rest of the world, what their opinion will be. >> so the president, he says, you know, it sounded very dire. because he was talking about folks who were getting social security checks, they're going to be delayed their payments. people who, regulators and

inspectors who are looking for loose nukes are not going to get paid as well. that this is a dire situation. do you think the president -- is that accurate. is that really true that all of those things might necessarily follow? >> every single one of those things will follow. there are a lot of tricks that are being played to carry us to the point at which we have to make a decision. once we reach that point, those bills can no longer be paid. and this is the issue that concerns me. i was not so concerned about the fiscal cliff as i was about the debt ceiling. >> why so? >> well, you see, this is really an historic opportunity for us. the fiscal cliff, the economy really was growing strong enough to get passed that. so we -- and we still have that strength. but we can't move beyond the debt ceiling issue. i knew that would be a stopper, a game stopper. so we have to address that. now, the conditions exist that there can be a grand compromise that will move the economy forward or we can just go into free fall.

for example, the last negotiation on the debt ceiling, well, the president, i thought, gave more than he should have given, but nonetheless, he did that. now the onus is on the rps to come to the table. because, see, what has happened is, tax cuts are essentially -- tax increases are off the table. and we got revenue from that. not enough that we needed, but that's off the table. and that was a big issue for the republicans. >> danny, let's move on. let's talk about the possibility of a government shutdown. the president seemed to indicate that it was, first of all, the republicans' responsibility. that they were going to take the onus, the responsibility for this, and that it was potentially something that he was willing to allow happen, because he felt that most people will blame the republicans. if the government shuts down, what does that mean for most folks? that is a lot of government jobs, a lot of people out of work. >> it means that people that get social security checks will not

get those academchecks. it means people in the military, defense, they won't get paid. those things dependent on government revenue will come to a halt. there has to be a compromise. we just have to. it's unthinkable we won't compromise. >> hopefully they'll compromise. there are just weeks left. we are waiting. it seems like we're in the same position you and i were in just a couple of weeks ago. we were talking about averting the fiscal cliff. hopefully we won't have to have that same kind of standoff. but it certainly sounds like neither side is budging. we've heard from the republicans, their response as well, and they say, we're sticking to our guns. we're also going to talk to personal financial expert suze orman. she'll weigh in and your personal finances as well. be back in a moment. citracal slow release continuously releases calcium plus d with efficient absorption in one daily dose. citracal slow release.

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president obama talking about one of the most controversial issues that any leader has to deal with. and that, of course, is gun control. and in his speech just moments ago, he invoked the newtown shooting massacre and he talked about the push to tighten gun restrictions. here's what he said. >> what's uppermost in my mind is making sure that i'm honest with the american people and with members of congress about what i think will work, what i think is something that will make a difference and so repeat what i've said earlier, if there is a step that we can take that will save even one child from what happened in newtown, we should take that step. >> i want to bring in our deborah feyerick. deb, so the president already said that joe biden, the vice president's task force says he's gotten a list of recommendations. we expect that there are going

to be more specifics coming out later in the week. but there are two things that he seemed to indicate that he could do by executive order. and that is, one, try to track those guns that get in the hands of criminals or those who are mentally unstable. that there's some way that he can do that. and the other thing is really just making sure that the existing rules on the books are better enforced. i image that's probably good news for folks in that town, in newtown, and others who have been pushing that. >> and not just for the folks in newtown, but really all across america. one of the things you hear when gun control advocates speak, and that is that 33 people, on average, are killed by guns in the united states every day. and while the president was speaking, first of all, he said that he is planning on meeting with vice president biden later on this afternoon, just to go over some of the things that have been discussed. they'll have a larger meeting with more proposals later in the week. but two of the things the president also hit on, he said the need for background checks on all gun sales as well as banning military-type assault

weapons and high-ammunition magazines. that's magazines that are higher than ten rounds per magazine. those are two things that he really hit on during this press conference. and while this is all going on, suzanne, there was a big gun summit taking place at john hopkins university, and the keynote speaker was mayor michael bloomberg. he heads a coalition of 800 mayors across the country. he supported the two proposals that are before congress, that the president mentioned, but he also said that he believes that gun trafficking should be made a federal crime. take a listen. >> every day of the year, an average of 33 americans are murdered with guns. here's another way to think about what that means. one week from today, president obama will take the oath of office for his second term. and unless we take action, during those four years, some 48,000 americans will be killed

with guns. nearly twice as many people as were killed in combat during the entire vietnam war. >> all right. deb feyerick, thanks very much. i'm suzanne malveaux. president obama using the bully pulpit, of course, to press congressional republicans to raise the country's debt limit, so the united states can pay its bills. he says, basically, we are not a deadbeat nation. the president basically saying that this is going to be up for congress to decide. i want to bring author and historian, douglas brinkley, professor at rice university. clearly, the president is laying down the gauntlet here. he says common sense is going to prevail. but he seems very confident, he said it twice, that the american people are on his side when it comes to separating these two issues. moving forward, paying the bills, and worrying about raising the debt limit later. is this a good strategy?

>> well, it is, and it's also just the box he happens to be in right now. i think the key line today is that we are not a deadbeat nation, and come hell or high water, we've got to pay our bills. but more importantly, in 2012, i thought president obama really was the firewall candidate for president, the progressive firewall. he is constantly saying, you will not touch medicare and medicaid and social security. he's a protector, really, of the new deal and great society programs that's facing a great reaction. the tea party right, the conservative movement that wants to dismantle and roll back a lot of these measures. whether it's, you know, epa or public housing, you can make a laundry list of 20. so this press conference today was just what you expect right now, kind of more gridlock and two different visions of the country. but president obama gets 50% or more public approval ratings while congress is at about 17%, so it's not a bad strategy for

this president. but it's constantly putting america on the precipice of these sort of last-minute debt deals. and it's trying on all of us. >> and doug, do you think it was accurate, do you think it was fair what the president said when he talked about republicans, a certain group within the party, that really is about a different vision about what the government should be doing and that they are suspicious of the government when it comes to providing health care, when it comes to dealing with people's money, when it comes to dealing with their education. did he strike the right tone there? >> i think he struck a good tone. one of the problems i had with the press conference may not have been the president's fault. i didn't think we asked a lot of other questions. we're living in the age of climate change. it doesn't come up. what are we going to do about china? can he go to china, can we create more favorable trade terms in china? we were stuck on this showdown, two scorpions in a bottle to use

a cold war metaphor. now the scorpions are the white house versus congress. and we seem to be replaying this same scenario over and over again, and it's hard to get a sense of the vision of the second term, if every three months, we're going to be in these kind of tight, you know, of debt ceiling fiscal cliff types of negotiations. so somehow, this spring, the president has got to break this syndrome. and i think he made it very clear, if the government goes bankrupt, congress will be blamed and he'll start really using executive authority in a way probably unprecedented since theodore roosevelt. >> doug, you brought up a really good point there, the fact that some things just didn't come up, the middle east did not come up, these are the kind of things, we're now stuck in this discussion over what's going to happen now, the next showdown over congress. one of the things that was a sidebar, a lot of criticism he's been getting over his cabinet picks, whether or not it's diverse enough, whether or not

this is more reflective in what we've seen in lincoln's cabinet, or like what we saw with fdr. do you think it's fair? we are seeing those top jobs that are going treasury, defense, cia, all to white men. >> i think the photo you're flashing right now, photogate, it was a terrible image to get out there. it just shows the boy's club together. on the other hand, this president is clearly someone committed to diversity, two women on the supreme court. he had hillary clinton at secretary of state. she's leaving. it's hard to find somebody to replace her, of her stature. the president said, take a breath and wait until you see what my entire cabinet looks like, meaning that clearly women will be coming in in transportation or interior, some of the other posts that might become available soon. >> and doug, what do we make of

how the president is going to govern. is this the kind of congress he can work with to get something done, or will he have to use executive order, whether it's looking at something, dealing with the gun laws, gun legislation. whether it's small things he can chip away at when it comes to immigration reform. all kinds of things he can do as commander in chief, without working with congress? >> i think the big legislate eve achievement to barack obama will have taken place in obama care. he's going to have to fight to get that, to become a birth wright for all americans here in his second term. beyond that, i don't see a chance for much of a legislative agenda. the politics are just too rotten for it. subsequently, he's going to have to be known as this great executive power president. and he is going to have to -- he has great opportunities in foreign affairs. as i mentioned on the climate change issue, just talking about it and invoking it in the upcoming inaugural, make it an important part of his state of

the union address coming up. he's got to find other issues than this constant, every three months, you know, fighting congress over this. because there's no legacy for him in that. people will not go to the obama presidential library in chicago to see the pen that these debt debates, the document he signed on these things. and it's starting to frustrate people. he needs to get vision, not just practical day-by-day governing. >> and the president said, those who know me, i'm a friendly guy, i boy a good party here, i'm even inviting republicans over to the white house and they don't come, it's not good optics. this just makes republicans mad, just insane when they hear that kind of thing. >> look, i think president obama is who he is, he's an intellectual, but also very warm and very engaging. i'm one of the historians that he invites to the white house

periodically. we have a marvelous time talking about history and laughing. i think he's correct today, that a lot of republicans don't want to be in a photo op with him, it doesn't play back in his congressional district. and every two years, here's president obama with his arm against a republican, and someone will use that against a certain member of congress. so i don't think we can blame the president for his style. it's just another part of this terrible political gridlock we have. president obama is a warm and engaging man. he doesn't have the charm of a john f. kennedy or ronald reagan, but he's plenty friendly to everybody he meets, including reporters. >> he is, indeed. doug, thanks. i want to play some of the highlights from the presidential press conference. this is really what drove the conversation. it is all about the need for the government to pay our bills. >> to even entertain the idea of

this happening, of the united states of america not paying its bills, is irresponsible. it's absurd. as the speaker said two years ago, and i'm quoting speaker boehner now, a financial disaster not only for us, but for the worldwide economy. so we've got to pay our bills. and republicans in congress have two choices here. they can act responsibly and pay america's bills, or they can act irresponsibly and put america through another economic crisis. but they will not collect a ransom in exchange for not crashing the american economy. the financial well-being of the american people is not leverage to be used. the full faith and credit of the united states of america is not a bargaining chip. and they better choose quickly, because time is running short. the last time republicans in congress even flirted with this

idea, our aaa credit rating was downgraded for the first time in our history, our business created the fewest jobs of nearly any month in the last three years, and ironically, the whole fiasco actually added to the deficit. so it shouldn't be surprising, given all this talk, that the american people think washington is hurting rather than helping the country at the moment. >> and coming up this hour, our favorite personal finance expert, suze orman. she's got a solution for the u.s. economy. cut up the credit cards! don't rely on these new revenues to bail you out. suze orman's plan for president obama next four years, plus her plan to help you with your personal debt well. and it is all waste. that's right, a new report saying nearly half of the world's food is wasted. self-proclaimed dumpster diver, jane velez-mitchell, is weighing in.

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this just in. cnn confirming now with a source that is familiar with the situation that president george h.w. bush, he is being discharged today from a houston hospital. you're seeing pictures of him there. the former president being released today. this is after nearly two months after treatment for a bronchitis-related cough, we are learning here, and other health-related issues. the president in the hospital for a couple of months there, tending to some of those health-related issues. he is 88 years old, of course, so keeping a very close eye on him, and out of an abundance of caution, as well. we certainly wish him well and good health. now the former president out of the hospital. and now president obama holding the last news conference of his first term, so what does

he think members of congress should do about a number of things including the debt ceiling, moving on, immigration reform, his agenda for the second term. i want to bring in our dana bash on capitol hill with this. first of all, dana, he was very adamant about the debt ceiling and the fact that that is not going to hold the american people hostage, in his words, from moving forward and spending what needs to be spent, making the kinds of cuts that need to be cut. but he is not going to use that, really, as a bargaining chip. what republicans are already responding. what are they saying? >> that's right. and even before the president spoke, we were hearing from republican leadership aides, suzanne, particularly in the house, that they were trying to get the upper hand in this fight, and really leverage here, the idea that they are willing to, at least, they say they're more willing to go to the brink of defaulting on the u.s.'s

debt, on shutting down the government, if it means the president not giving in on what they want, which is cutting spending. and as you said, we got a couple of responses from the republican leaders in the house and the senate. i'll read you this hour the one from the republican senate leader, mitch mcconnell. he said the president and his allies need to get serious about spending and the debt limit debate is the perfect time for it. i do know that the most important issue confronting the future of our country is our deficit and debt. so we're hoping for a new seriousness on the part of the country, with regard to the single biggest issue confronting the country and we look forward to working with him to do something about this huge, huge problem. along with this, suzanne, i and other reporters got a series of memos from mitch mcconnell's office and others, trying to make the point this is not new, linking spending restraint with the debt ceiling, at least bumping up against it, saying in 1985, '93, '95, and '97, all of those years when there was

budget-criminaled legislation passed, it was all hand and glove with debt ceiling. so they argue, as much as the president say that the republicans are holding this hostage, it is not a new concept to link these two. >> dana, that's very true. the president said in response to that, this is the first time they've come up to the very brink, the very end when it comes to defaulting on their loans there. the president laid out a plan. i wonder if there's any response from congress. he said, first, let's set the debt ceiling aside, let's pay our bills, and then let's have a robust debate regarding the debt ceiling. is that something that republicans are willing to do here, or it must be linked? the two have to go hand in hand? >> reporter: they are insisting, and when i say they, i'm talking about house republicans and the senate republican leader, but they have to go hand in hand. this is something that we heard over and over and over again when we had this debate the last time, back in the summer of 2011. andion that ve ioion you know t suzanne. but the house speaker and his aides are telling us that they

really mean it this time. that there has to be a dollar of spending cuts for every dollar that the u.s. agrees to raise the debt limit. and that they would even go for a two or three-month extension as they try to work on a more global discussion of cutting spending. but even if there's an extension, it has to go point by point. the other thing i want to mention, suzanne, which i thought was really interesting, after covering the white house under george bush, that last question about the fact that he doesn't socialize much with congress, that speaks to where we are right now. he's right, if he socialized more, it wouldn't change the differences in political philosophy, but there is something to be said for the fact that there is -- all of this is confrontation. and confrontation is added to by a lack of trust. and there isn't a lack of trust, because these guys really don't know each other very well. and perhaps when he goes golfing with his aides, he could ask a member of congress or two to come. i guarantee you and i bet you

would agree that that would happen. >> i remember when he first took office, he had a super bowl party, and all the republicans piled in, and it was a good time, but it doesn't last for long. it was interesting too, dana, because he said at the very end, he said, whether he's the life of the party or a stick in the mud, he wasn't really sure that things were going to change. dana, thank you very much. appreciate it. the president using the last news conference, the first term, to push forward for the future. and suze orman will weigh in, up next. >> republicans in congress have two choices here. they can act responsibly and pay america's bills, or they can act irresponsibly and put america through another economic crisis. but they will not collect a ransom in exchange for not crashing the american economy.

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so the president started his news conference today, talking about the need for congress to raise the debt ceiling here. he says it is not a license to spend more, as republicans have claimed. here's what he said. >> you don't go out to dinner and then, you know, eat all you want, and then leave without paying the check. and if you do, you're breaking the law. >> all right. so since 1962, congress has raised the debt limit 76 times. 11 of those times occurred just in the past ten years. what does it mean, personally, if congress fails to raise the debt ceiling here? suze orman, host of "the suze

orman show" for cnbc for 12 years, named one of "forbes's" most powerful women and one of "time's" most influential people, suze, good to see you. first of all, is that analogy correct? when you listen to the president saying, look, this is about paying the for a meal. when you go to a restaurant, you can't skip out on the bill, you've got to pay your debts or you're breaking the law. >> it's one of the first analogies that i've heard that is absolutely 100% correct. why? because you go out to eat, you've consumed that food. you are probably already digesting that food. and then the bill comes. and you have to pay for what you already just ate. again, it is very important for people to understand. and i'm not exactly sure that they understand that raising the debt ceiling doesn't mean it's extending your credit limit so you can spend more money for future goods. it's about raising the credit limit so that you have the money to pay off the bills that you've

already spent the money on. so i thought it was absolutely a brilliant example. >> so you're in line with the president, then. deal with the debt ceiling issue later, pay the bills first, and have this debate over whether or not it's a good idea, and how it's responsible to actually deal with the federal deficit? >> i think right now, in the united states of america, the people, forget about congress, forget about -- let's talk about the people, the personal financial issues here. they need to know that if they're getting unemployment or they're getting social security, unemployment, not so much, but social security, veterans benefit, small businesses, they need to know that their future is secure. that they're not all of a sudden going to get something and say, sorry, you don't get your paycheck, that they're living on. and when they start to get afraid, they stop spending money. when they stop spending money, the whole economy suffers. so why can't you just say to them, of course we're going to be raising the debt ceiling.

we don't actually have a choice. take that fare out of their lives and then let's deal with the problem that they haven't been able to deal with for years now, but hopefully they'll be able to do something about this time. >> it's a little confusing, suze, when you talk about that. we're talking about the debt ceiling. we're talking about the government owing money here. we're talking about raising the debt ceiling. the government owing more money. how does that square with your philosophy? where you always say, look, you know what, if you're going to buy it, you've got to pay for it. you can't keep borrowing. yes, but we are now, remember, we have to pay for services that we've already spent the money on. we're not saying, let's keep borrowing so we can continue to spend more than we have. we're simply saying, according to what he said today, let's raise it so that we can pay the bills that we already have. because here's the truth. if we don't pay those bills that we already have, who's going to get hurt the most? it's going to be the everyday

people that are counting on their checks, that they're not going to get. and that's going to hurt them. and they can't afford to be hurt anymore than they've been hurt over the past few years. it's also going to hurt in term of what might happen to interests, what will happen to all kinds of things that go on here. so it's almost like saying, is this even a discussion? the debt ceiling has to be raised. >> and suzanne, i want you to weigh in on this. the president saying, if you don't raise the debt ceiling, it could have a catastrophic impact on a lot of folk. let's listen. >> congressional republicans refuse to pay america's bills on time. social security checks and veterans benefits will be delayed. we might not be able to pay our troops or honor or contracts with small business owners. food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn't get their paychecks. investors around the world will

ask if the united states of america is, in fact, a safe bet. marks could go haywire, interest rates would spike for anybody who borrows money. every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. >> does that sound right to you, suze? is this something that the president is overstating? does that sound like that would be the possible scenario? >> i don't think that he's overstating it, at all, especially, let's just talk about the social security recipients. many people now are receiving social security at the exact same time, interest rates are so low that they are not getting the income from their investments that they need. so maybe at a time when they really didn't need their social security check, because they were living off of the interest income of their investments and their cds, that's not happening for them anymore. so this social security is a need, now, for them. you take that away, they won't be able to pay their rent, they won't be able to pay their

mortgage, that affects all the banks, that starts to affect everything. it's true. other people will look at us and go, should we be investigation in the united states of america? so watch what happens with the ten-year treasury bond and interest rates going up, i don't think he overstated it all. >> finally, suze, what would happen if the government shuts down? >> oh, my god, if the government shuts down, everything stops working. who protects you? who puts out your fires? who protects you on the defense level? who takes care of everything that's going on? you know, the government has become a big babysitter for the majority of services out there, whether it's medicare or medicaid and all these things. so if you shut down, you really have to -- if you thought the fiscal cliff was something, that's nothing compared to what we're going through right now. >> all right, suze, hang with us, stay with us. we're going to, of course, talk about personal finances. the government trying to dig its

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president obama said in his news conference today that america needs to pay its bills, that is why he is fighting to raise the debt ceiling. meanwhile, there are millions of americans who have the same problem, they can't pay their bills. as the economy is stumbling to get back on its feet, you have 25 million people who are out of work or unable to find full-time work. they're trying to figure out how to get their finances in order. and suze orman has helped many families get back on track.

suze, we'll talk about a couple of things here. you've talked a lot about the fact that the middle class is shrinking, particularly over the last few years. we know the median family income is only about $50,000 a year. it's either a couple making $25,000 each or a single person making $50,000. it's not much, especially if you've got kids. then you've got the government, coming out with a shocking report that one in six americans is poor today. 45 million americans. how do people get out of poverty when you look at those kinds of statistics and the economic environment that we're in today? >> now, i wish i had an answer to that one. you know, i've said before that there is a highway into poverty today, and there's not even a sidewalk out. and there's very little, once you get there, and you are so there, that can be done to help you at this point in time. because there aren't the jobs, there aren't the resources, there aren't the credit limits that there used to be.

so the real key here is, what can you do out there right now to prevent yourself from going into poverty? and i always say that there are three things. three things that if we could just learn to ask ourselves, before we spend a penny. number one, is it a need or a want? obviously, if it's a need, you have to buy it. if it's a want, can you just walk away? you have to get as much pleasure in saving as you do spending. this era of spending, spending, spending has got to go. and last but not least, we all have to get as much pleasu in saving as we do spending. so, you know, it's very interesting. >> suze, what if you're one of those people who's unemployed. you just can't find work. what should you do? how can you improve your life if you don't have a job? >> yeah, that's, you know, i wish i had a magic wand there.

so it's, if you don't have a job and you need to make money, there's got to be something that you can do. i don't care if that means you become a dog walker, you babysit, i don't know what it is that you do. but there's got to be something that you can do to bring in money. but the key here is, that's why i've been saying to all of you for so long, please have an eight-month emergency fund. please make sure you're out of credit card debt. because in case you lose your job, it might take you eight months to one year to find another one. and once you've lost your job, don't keep living like you were living. cut back on everything. so once you're in trouble, just like the government is right now, once you're in trouble big-time, and there's nothing left for you to cut, it's very difficult for you to get out. so the key is not to let yourself get into that situation to begin with. >> is there any reason why people who have jobs and who are doing fairly well should be

worried? >> yeah, i have to tell you, when you watch what's going on in washington, when you watch that our future is in the hands of people who literally cannot agree on anything, you have to worry in the sense of that, anything can happen. and it's not just, do you get to keep your job or not? do you stay well? do you get ill? does somebody else in your family have an accident and then you have to take care of them? so you have to prepare for the what-ifs of tomorrow, today, and people just don't do that. they don't have a will, they don't have a trust, they don't have a savings account. they just don't think anything will ever happen to them, until it does. >> and finally, suze, you have so many of these jobs in the that have gone away. you have machines that do things that people used to do themselves, and now you have these manufacturing jobs that require much higher skills. do people just need to invest in training? do they need to focus on a different area, like perhaps

where the jobs are? >> well, you know, you can invest where the jobs are, and then maybe those jobs won't be there when you get there. i think it's important for all of you, number one, do something that your job doesn't become obsolete. whether that's a nurse or a caretaker or do something where you can be okay. by the way, there is a company by the name of care.com. so if you don't have a job, go to care.com, and they will connect you with people who need care, to those who want to provide care. whether it's a babysitter, a dog walker, something like that. >> all right. suze orman, always great to see you. thank you so much. really appreciate it. colin powell is becoming more critical now of the republican party. listen to this. >> there's also a dark, a dark vein of intolerance in some parts of the party. what do i mean by that? what i mean by that is they still sort of look down on

minorities. >> is he right? and if so, what does it mean for the republican party? we're going to take a look at the gop's relationship when it comes to minorities. ♪ why not make lunch more than just lunch? with two times the points on dining in restaurants, you may find yourself asking why not, a lot. chase sapphire preferred. there's more to enjoy.

president obama and congressional republicans appear to be on a collision course over the debt ceiling. a news conference today earlier, the president told lawmakers not to use the debt ceiling and the debate as a bargaining chip.

>> so to even entertain the idea of this happening, of the united states of america not paying its bills, is irresponsible. it's absurd. as the speaker said two years ago, and i'm quoting speaker boehner, it would be a financial disaster not only for us, but for the worldwide economy. >> i want to bring in republican strategist ana nah varo and tara wall. first of all, your reaction to the president's hardline. he basically laid down the red line here and said, he's not willing to discuss raising the debt limit here, as part of spending the bills. and the deficit reduction talks. that's just not going to happen. tara? >> i didn't get a chance to see a lot of it, but my first reaction is, i think most republicans expect the president not just to put it at the feet of the republicans, but i think the argument that's been made, and the republicans have made is

to say that there needs to be a backup plan. what is the plan "b" when you do this. and i think he does owe americans an opportunity to see what his plan "b" is. and i think many of us, many of those who work in politics and media last week was stunned when some liberals, even moderates, suggested that spending is not the problem, there is no problem with spending. i think it's delusional to believe we don't have a spend progress, in this country. >> and the president has made it clear, there's not a plan "b." the plan is to put it on the members of congress to allow a government shutdown to take place. that doesn't seem to be something your party would be interested in. >> i don't think the american people are interested in that. and i did watch the press conference, and i watched all of it. and i have to say to you, suzanne, i finished watching that conference, feeling very worried.

i'm a republican, but i'm an american first. and i actually believe that we should have a government that does bipartisan compromises and that addresses the issues that are facing us. and what i heard from president obama today was very harsh words. they were not constructive words, leading us, setting the stage for a negotiation. you don't begin negotiation by say welcome i'm not going to negotiate. just fighting words. so, by the way, i know that the republican party, and i know that the republicans in congress have not made it easy for him. i know it takes two to tango. but nobody's got the bully pulpit, that the president of the united states has. and i would expect from him to be much more of a uniter come this second term. because he's got as much skin in the game as republicans do, if he wants to build the legacy. >> so tara, would you recommend -- i mean, is this

possible, to take back to republican leadership, to say, look, why not actually separate the two and go along with the president's plan, put the debt ceiling argument aside, move forward, pay the bills, as he suggests, and then have a debate that he says would be more balanced when you talk about raising revenues and also spending cuts as well. is that a possibility? >> the country just had a huge set of tax increases, right? i think that at the end of the day, you know, what americans expect, too, is a measured approach to this. and, again, addressing -- you know, spending has to be on the table. the issue of spending has to be on the table. i think that has to be addressed. i think that's a valid argument to be made. and i think at the end of the day, what will probably likely happen is that some of this will have to be delayed. we'll have to wait until some of the tax revenues do come in to be able to pay for it. but at the end of the day, you can't just assert that republicans alone are being disingenuous. i think at the end of the day, americans are frustrated with

congress in general that we're even at this point, that it's taken us this long, that we've faced a fiscal cliff. nobody wants to face another fiscal disaster. at the end of the day, it is to ana's point, the president is the president. he's in charge, he's the leader. and you have to start, i think, discussions in an honest bipartisan way and not lobbying, you know, throwing -- you know, throwing out this notion that it's just at the feet of republicans. >> i want to bring in another point here, talk about one more issue before i let you guys go. we heard from colin paul over the weekend, on one of the sunday shows, saying that there was a dark screen in the republican party. saying that there was racial division. i want you to respond to that. ana, do you think that colin powell is seeing this accurately. that there is some real work to be done? >> i think there's still work to be done in america, period, suzanne. you know, all three of us are minorities. we know that racism still exists in america. it exists whether you're a democrat or a republican.

it exists in the united states of america, period. but i'd also like to point out that right now, we have a black u.s. senator who's republican and we've got two hispanic u.s. senators that are republican. and so, i think that while there's still work to be done amongst all of america, we have made some strides in the republican party and some of those needs to be recognized. it can't just be about chastising. i welcome general powell's criticism. i think we should have a big tent where his criticism and self-introspection is part of looking at where we go as a party. but i also think we need to recognize some of the steps that have been made. >> all right, ana, tara, thank you very much. appreciate both of you weighing in. it's a good discussion and we'll continue it. sorry we've run out of time. breaking news. former president george h.w. bush being discharged today, this is after being treated for bronchitis. it's a bacterial infection, a persistent cough. he says, "i am deeply grateful

for the wonderful doctors and nurses at methodist who took such good care of me." that coming from the former preside president. it comes nearly two months of the treatment of that bronchitis-related cough and some other health hsissues. the former president, now 88 years old, we wish him all the best in his recovery and his good health.

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president obama just spent an hour laying out some of the key challenges of the next term, including the fight to raise the debt ceiling. this is something the president says there is really no room to compromise on. but even a tougher fiscal challenge could be tax reform. we're not just talking about whether or not to raise taxes, but actually looking at the tax code itself. all 70,000 pages of it. christine romans explains. >> reporter: the challenge, tax reform. for the first time in 20 years, taxes are going up for the rich. they'll pay a higher top marginal income tax rate, higher taxes on dividends and capital gains, and a higher estate tax rate. but it could have been worse. >> i think that the wealthy got off pretty easily here. there's a modest tax increase for the very wealthiest in this society, a very tiny percentage. i, frankly, that there are more taxes coming and they're going to bite more deeply into the middle class. >> approximately two-thirds of american will pay more taxes. the tax bite for the middle

class comes from the end of payroll tax cut, which wasn't renewed in the fiscal cliff deal. but whatever happened to comprehensive tax reform? >> the irs tax code is still a nightmare. it's too complex, too costly, and too unfair. >> reporter: both sides say they're open to simplifying the tax code. more than 70,000 pages in 2012. the u.s. government gives away more than $1 trillion a year in tax breaks, but republicans say reform isn't about squeezing more money out of taxpayers. >> i think tax reform is a good idea, but now that we have resolved the revenue issue, tax reform ought to be revenue neutral, as it was back during the reagan administration. >> reporter: the president and congressional democrats disagree. >> but spending cuts must be balanced with more reforms to our tax code. the wealthiest individuals and the biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most americans. >> trust me. there are plenty of things within that tax code, these

loopholes, where people can park their money on some island offshore and not pay taxes, these are things that need to be closed. >> reporter: a major overhaul of the tax code hasn't happened since 1986, when the political system was much less employerized. but deficit hawks insist that a grand bargain is critical. >> we've got to reform the tax code and raise more revenues than we have. and importantly, we have to focus on controlling spending and reforming our entitlements, which are right now unsustainable. delaying all of this is irresponsible. >> reporter: hard choices ahead, whe and whether the congress and the president can come together remains to be unseen. christine romans, new york. a new report says more than half of the world's food is wasted. self-acclaimed dumpster diver, jane velez-mitchell, she's up next. she knows you like no one else.

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so just how much food do you actually throw away? a new report finds a staggering amount of food wasted around the globe. here is the breakdown. britain's institution of mechanical engineers says that about 4.4 billion tons of food is produced annually, roughly half of it never eaten. some of it is lost in efficient harvesting, storage, transportation. the rest wasted by markets or consumers. well, none of this comes as a surprise for my next guest, jane velez-mitchell. she's been preaching about food being wasted while people go

hungry on her show, jane velez-mitchell, which airs on our sister network hln. very nice to see you here. this is a pet peeve of mine as well. people make fun of me, we go out to eat, and there is one little piece of meat left, i'll take that, put it in a doggy bag and bring it home. people laugh, they think it is funny. you're very passionate about this. >> good for you. >> tell us why. why does this matter. >> it is obscene when right now as we speak there are children around the world dying of starvation and malnutrition that the united states, people in america throw out approximately 40% of all the food that we produce. it is really a moral issue. and it is an exponential problem. it is not just the food itself. it is the water that is used to create that food. it is the animals raised on factory farms in those conditions who sacrifice their lives all for nothing, to be discarded? it is absolutely incredible. it is also creating an

environmental crisis. all that discarded food, rotting in land fills, is creating enormous amounts of methane gas. so however you look at it, if you care about the environment, if you care about world hunger, if you care about the condition of animals, it's an abomination, it has got to stop. >> this is something everybody can actually do. they can actually control how much food they're wasting. you went a step further, you went what is called dumpster diving in new york. you hit the streets with a group of what is called freegans to collect food that had been thrown out by the stores, the restaurants. i want our audience to see what you found. >> look at this bread, look. >> it looks like sliced bagels. >> slice ed bagels. look at this. >> we're usually careful to not rip right in. >> i made a mistake already. look at this bread. look at all this bread. look at all this bread. oh, my gosh. >> not only bread you also found vegetables, and you managed to cook all of this from the trash and had it for dinner.

tell us what that was like. >> it was tasty. it was wonderful. the freegans i talked to who, by the way, are highly educated professionals and teachers who consider this a moral issue and do it because they feel it is an ethical obligation to eat food so it doesn't go to waste, they say they have never gotten sick. this is a complex problem. part of it is first of all, i got to say, the food i found, the supermarkets often slice it up so it cannot be easily eaten by people out of the garbage. we found bagels and they thinly slice them to try to stop people from eating them. to me, that just adds insult to injury here. but the issue is so complex. it is part of it is the expiration dates. food is often perfectly edible after the expiration date, but to be on the safe side, supermarkets throw it out anyway. now i see people who are hungry, and there are people in our economy hungry, are going around and taking food out of the garbage that is perfectly edible. part of it is we're spoiled. we have got perfectly good apple

here, and i'm going to take my own inventory, suzanne, i came in with this apple to work today, but guess what was on my desk? this sort of beaten up apple. do i want to eat this one, no? because i'm spoiled. but i will eat this one because it is edible. >> and, jane, did you find a lot of the food, i don't know if it is recommended by health officials or not, whether or not you should be going into the garbage and getting the food, but what did you make of it? did it seem like it was decent food, good food, food that would not hurt you or harm your health? >> yes. as a matter of fact, because much of it is just discarded. the freegans have a method to the madness. they know when to go after the food, after the store closes. they look at the expiration date and sometimes they find stuff that hasn't hit the expiration date because many supermarkets are throwing out food before it hits the expiration date. you wouldn't recommend doing this without carefully considering the temperature, that's another factor. they know when to go and if it is just as cold outside as it

would be in the refrigerator inside the store, that's another added protection. there is a science to it. but when you consider if the alternative is going hungry, it is something people might want to consider. but just don't do it in your neighborhood. go to the next town over. >> jane velez-mitchell, thank you very much. good to see you as always. and, of course, it is a fascinating series. tune into that and her show airing on our sister network hln monday through friday. tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic. you and your doctor should balance the benefits

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